As the only company that has released a tablet that has managed to take a dent out of Apple's iPad sales (the Kindle Fire accounts for 22% of U.S. tablet sales), many people are looking forward to seeing what Amazon's next generation Kindle Fire has in store. The first generation Kindle Fire made a splash with a $199 price point and 7" form-factor, but Amazon is looking to expand the lineup’s appeal with second generation the devices.

The first up is a refreshed 7" model. It keeps the same look as the original, but includes a faster processor and twice the RAM. In addition, the price has been slashed from $199 to $159. It's hard to argue with faster performance and a cheaper price tag.

But the big announcement is the Kindle Fire HD. This new tablet is available with a 7" (1280x800) or 8.9" IPS display (1920x1200). The 8.9" Kindle Fire HD is only 8.8mm thick and weighs just 1.25 pounds. Powering the Kindle Fire HD is a Texas Instruments OMAP 4470 processor.

Amazon CEO Jeff Bezos even took at a dig at the Apple iPad by announcing that the Kindle Fire HD comes with dual stereo speakers that feature Dolby Digital Plus technology. The Kindle Fire HD also includes dual Wi-Fi antennas an MIMO compared to a single Wi-Fi antenna on the iPad and Nexus 7. Bezos says this allows its Kindle Fire HD tablets to outperform all competitors in Wi-Fi bandwidth tests.

Kindle Fire HD 8.9" showing "FreeTime"

Another interesting feature that Amazon is introducing with the Kindle Fire HD is FreeTime. FreeTime allows a parents to setup profiles on the device so that children will only have access to "kid-friendly" content while the grownups can still have access to entire spectrum of content. The profiles will also allow parents to limit how much time their child plays on the device.

The Kindle Fire HD will be available with 16GB of storage capacity and also includes HDMI out and Bluetooth. The 7" model will be priced at $199 (ships September 14) while the 8.9" model rings in at $299 (ships November 20).

Amazon also announced one additional member to the Kindle Fire HD family. The Kindle Fire HD LTE 4G model is priced at $499, includes 32GB of storage, and comes with an amazing data package. For just $49.99/year, you get 250MB of bandwidth per month, 20GB of cloud storage space, and a $10 in Appstore credit. Can you say game changer?

The Kindle Fire HD LTE 4G will ship on November 20.

For those that prefer Amazon's more traditional line of e-readers, the company also today announced the Kindle Paperwhite. The Kindle Paperwhite features a higher resolution screen with 212 ppi (62 percent more pixels than previous model) that offers whiter whites and blacker blacks.

Kindle Paperwhite

The capacitive touch screen device is 9.1mm thick, weighs just 7.5 ounces, and had an 8-week battery life. It costs $119 and will ship on October 1. The Kindle Paperwhite 3G will also ship on October 1 for $179.

Even further done the e-reader ladder is the standard "Kindle". Amazon has updated the Kindle to include new fonts and crisper text, and has dropped the price from $79 to $69. It will ship on September 14.

There may be a bump in the stock price after the iPhone5 announcement or after the initial sales spike, but maybe not. One thing's for sure: The Fire HD is going to put negative pressure on Apple's obscene margins. They won't die, but they'll come back down to earth.

Amazon should also offer more comparable 4G pricing to emphasize the value, e.g. free with 2-year $30/mo contract.

Amazon is in a very different business than other tech companies out there.

Amazon is ostensibly a tech company, but they are much more in line with a retailer like Walmart. Like retailers and unlike techs, they have razor thin margins and sell loss leaders as a matter of course. Their concern is more on sales volume and hooking in customers at any cost. Amazon is giving away or losing money on Kindle hardware to make pennies on media (music, movies, apps) and advertising.

Nobody really makes money on media sales. This is to hook more people into the Amazon ecosystem.

It is the opposite approach of companies like Apple, Microsoft, IBM, and numerous OEMs, where the product itself is where they make their money.

Amazon's stock price is a reflection on this disconnect on how they are perceived. Apple, Microsoft, and IBM are very reasonably priced with multiples of about 15. Google is priced a bit higher at 20. Amazon is priced in the stratosphere at over 300, insanity.

Amazon is perceived as a tech company while their business model is actually that of a big box retailer, hence its crazy price.

As for the impact on other products, this is going to bury the Nexus 7. The original Fire, even with its worst-in-class hardware, still sold better than every other Android tablet by a significant margin. This was partly due to Amazon's vertically integrated customer-oriented approach (same reason the iPad is such a success, other companies should take note). The faster Fire at this new price is going to put it over the top in the non-iPad arena, thing is gonna sell like crazy.

I said that their business model is in line with a big box retailer, not a tech, which it is. Learn to read.

Unlike every other tech out there, Amazon sells loss leaders with the intent to hook more customers in. This is how retailers do business, and it is also why they can undercut every single OEM out there with the Fire price. Do you think that Asus/Acer/Samsung can compete on this price? No, they cannot.

And the stock price isn't based on a mystical perception, this is common knowledge! A company that large is overpriced because investors are treating it like a tech while their business model is that of a retailer, hence the massive disconnect with their price multiple. Lord knows when investors are expecting revenue to catch up with expectations. If Microsoft, Apple, or IBM had the same price multiple as Amazon then they'd be worth TRILLIONS each.

Or if you brought Amazon's price in line with those techs, its price would go all the way from 251 to 12.55.

quote: You're claiming Amazons stock price is based on some sort of mystical "perception" that only you realize, yet somehow all the experts in the Stock Market don't get, thus leading to it's "crazy price".

Free market only works when people are rational. Human beings are not. What happened to all the "experts" in the stock market in 2008?

AMZN is at a scary place right now, especially since it just hit all-time highs.

Current price multiple is at a loony 316. Amazon has great potential to profit in the future but the company seems completely uninterested in profiting this year or next year. They only care about revenue and gaining market share. There is a serious ceiling on their stock price until they show that they're ready to bring their PE back down to earth, either that or investors will finally do it for them by selling.

Amazon's nearest competitor is Walmart. Walmart stock doesn't rise or fall very much, and neither will Amazon's. Again, unless Amazon makes a fundamental change to their business model, and they won't because they are a retailer, they will eventually be seen as a retail stock instead of a tech stock.

I'm not saying Amazon is going to make a bundle. I'm saying that AAPL is going to soon find that it can no longer sell iPads at >50% margins, because they don't have any unique technology.

The last major fabless tech company to have huge margins, IIRC, was NVidia. Once ATI released the HD 4000 series, NVidia's margins plummeted back down to reasonable levels. That's what's going to happen to Apple in the coming years.

The Fire HD is just one part of it. Clovertrail tablets will unquestionably also put negative price pressure on the iPad within a year, as manufacturers have built <$300 Atom PCs for a couple years (add screen costs, subtract keyboard costs, and it'll be a wash). With phones, Nokia has the best camera (plus WP8 is looking great), Samsung has the best screen plus they're innovating like mad with stylus integration, apps have virtually caught up on Android, etc. Apple will have a hard time selling such high volumes at a premium. They won't die, of course, but their margins are going down.

I think we're years away from potential of the scenario you describe happening. iPad sales will cross 100 million by the end of the year, easy. The iPhone will be the highest selling phone going through the holidays.

Don't fight the trend, not until serious signs of a reversal show. Apple stores are more packed than ever and sales growth for iPhones and iPads have only accelerated. To put things in perspective, the worst selling Apple device, the AppleTV, outsells the XBox 360 and every single non-iPad tablet out there.

The Kindle Fire will do well but it won't be at the expense of the iPad. Both will carve out their own respective niches at their price points as the tablet market continues to expand, much the same way that iPhone sales continued to accelerate even as sales of Android phones also accelerated.

The wild card is an iPad mini at $250, that will take away from Fire sales in a big way given that it is a much more capable device with far more applications and the Apple brand.

The only casualties in this situation are RIM, Nokia (unless they can turn it around with the WP8 phones that do look very good), and tablets made by Samsung/Asus/Acer.

It isn't a zero sum game for everyone when the market is ballooning as quickly as it is.

quote: The wild card is an iPad mini at $250, that will take away from Fire sales in a big way given that it is a much more capable device with far more applications and the Apple brand.

It's not even announced and you already are propping it up. Wow. More capable <even though you know nothing about it yet> and more APPS, because more apps is better! ROFL! Standard AppleiTool bullshit as usual.